In what may be a precursor to the future of Sears here in the United States, Sears of Canada is seeking the approval of the Canadian bankruptcy court to close approximately 130 remaining stores and permanently laying off 12,000 employees.
Founded as Simpsons-Sears in 1952 as a partnership between Toronto’s Robert Simpson Company of Toronto and Sears Roebuck Co. of Chicago, the company appears to have failed to adapt to changing times and increased pressure from other more nimble retailers such as Amazon, Walmart, and BestBuy.
Like everything associated with the billionaire hedge fund operator and bully-boy Eddie Lampert and ESL Investments, it appears that the company may have been positioned and operated for the benefit of its major stockholder who would rather transfer real estate and dividends to his benefit rather than invest in long-term growth. This idea appears to be reinforced by Sears Canada’s Executive Chairman Brandon Stranzl, who previously worked as an investment analyst at ESL.
This appears to be a failure of leadership, leadership who raised hundreds of millions of dollars in potential capital investment by selling off its choice real estate holdings and leases to landlords – and then declaring hundreds of millions in special dividends to its shareholders. A move that benefited Lampert and ESL and mirrored Lampert’s actions in the United States.
Present day employees are not the only ones impacted as it appears that the retailer might use another Wall Street trick, purchasing an annuity to satisfy the company’s pension obligations to approximately 18,000 retirees and beneficiaries.
With retail cratering, especially against the onrushing onslaught of Amazon, Walmart, and Costco, it is important for employees to keep their eyes wide open to fast-developing conditions on the ground.